Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Biesse first half 2024 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Nicola Sautto, Group CFO of Biesse. Please go ahead, sir.
Thank you, and good afternoon. Here with me, Mr. Sandro Vitale, our Chief Strategy.
Hello, good afternoon.
We can go through the presentation. In the first slide, we have the worldwide presence of Biesse Group, 4,250 employees spread all over the world. In terms of revenues, the North America and South America posted 22%, EMEA 64%, and APAC 40%. EMEA remain the main market for Biesse Group.
The Biesse Group has three manufacturing areas, one in Italy with several industrial hubs, one in India and one in Thailand, and a showroom network in 22 countries all around the world. We present some information regarding the economic scenarios. The first information that we have is the inflation increased likely to more or less 6% in May, and this is increasing since the last month.
The outlook remain weak in EMEA area, and the interest rate expecting to remain high for the period 2024-2027, at least in a range of 4.5-5.5. This is very important numbers because as you can heard during the presentation, some of our clients had some credit troubles during the last month, and part of this trouble are related obviously to the higher interest rate. We included in the presentation some information also comes from some association in our sector, ACIMALL and UCIMU.
All the information presented shows a very negative situation for Italy between 19% to 21% less lower compared to the previous period to the comparable periods. But also Germany and France and U.K. posted a very negative performance during for example the first quarter in 2024.
Our biggest competitors like HOMAG posted in Q1 a very significant decline in sales -14%. And their provision for the fiscal year shows a decline up to 50%. As you probably know, SCM has started wage guarantee fund, Solidarietà, that cover approximately 2000 employees spread in the plants in our region and in the other part of Italy.
Then we have also Breton is one of the biggest competitor in our industry that has a drop in sales of approximately 50% in the first half of 2024 r, and they started the Cassa Integrazione for more than 200 people in Italy. So the scenario, the competitive scenario remain very, very weak, not only in Italy, but also in the rest of the world.
In the first half of the year, the Biesse Group posted a total revenues of roughly EUR 400 million, with a total order intake of EUR 300 million and EUR 50 million, more or less. Biesse, the previous perimeter, so without GMM, the number was EUR 300 million that compared to last year, minus EUR 43 million.
And, the GMM performance was €48 million in terms of order. In terms of backlog, the total backlog of the group is €277 million. €250 million comes from Biesse previous perimeter, and €28 million comes from GMM Group. So the trend of the order remain negative, and as you remember in the previous call, we mentioned that Q1 2023 was the highest peak in terms of sales. And since that Q we recorded negative trend order so since more than one year and a half.
Notwithstanding this decline in order, our backlog will remain solid and sustainable, so there's no problem in planning the production, so there's no interruption in industry plant, and so we do not see any type of problem in our backlog that, as once again, is more than €277 million.
In terms of performance of the first half, we put in the slide not only the comparable period of 2023, but also the second half of 2023 to show you the trend of the performances. So in terms of revenues, EUR 396 million, more or less, in terms of EBITDA, adjusted EUR 33 million, and in terms of EBIT, more than EUR 13 million.
In terms of net result, €3.9 million, that compared to last year, was 19.5%, €90 million, sorry. It's easy to understand the significant drop in terms of sales, considering that in the first half of 2023, there's no GMM Group. So if we compare €418 million in 2023 with the same parameter, so with only Biesse, the number is €333 million, so more than €80 million less in one year. In the following slide 11, we presented the bridge of net result. It's a very interesting view. The chart is split in two.
The left side is related to Biesse, and the right side to GMM, because, as you know, last year, GMM was not included in the figures, so we put the GMM aside in the presentation to give you a better view. So in terms of Biesse, as you can see, we had a drop of EUR 85 million, and in terms of margin, means, thirty million less compared to last year. This is not good news. Obviously, the good news included in this number is that, in terms of margin, the group was able to overperform the first half in 2023, with more than 44.4% in terms of marginality.
Then in terms of cost, the Group react to the problem, and accelerate all the strategic initiatives included in the 2024-2027 plan, and we accelerate all these activities and these strategic initiatives. And the result of this acceleration is roughly €10 million of saving compared to last year in terms of OpEx and in terms of staff cost. We started with the Cassa Integrazione in Biesse last year, then we accrue a specific provision for that Cassa Integrazione.
So in this first six months, we saw the results of our plan in terms of closure of industrial hub, in terms of reduction of commercial companies all over the world, and aggregate the commercial company in the biggest company in the country.
So for example, we closed some GMM companies all over the world, including the commercial force, contracts, and clients in the Biesse legal entity already presented in the market, to create synergies in terms of people, and in terms of G&A cost, but also to give the possibility to the Biesse company and commercial force to sell all the product in only one place.
Then we have, obviously, a significant reduction in terms of taxes, EUR 3.7 million, due to a reduction of pre-tax result compared to last year. Then we have a saving in the financial area, more related to the effects of changes, and also in a better management in terms of loans and cash.
So the group Biesse posted a net result negative compared to last year of EUR 14.6 million, partially compensated by the GMM Group, that in the period, so in the first half, posted EUR 62 million in terms of sales, and EBITDA of EUR 66.3 million. As you can see, GMM Group was affected by EUR 3 million of non-recurring costs.
This non-recurring cost is partially related to the advisory fee related to the acquisition of the company in January, and the other part is the accrual of EUR 2 million of restructuring provision related to the employee of GMM and Bavelloni. There are a lot of people that will be involved in the industrial restructuring, and so we posted these accrual in the first half to compensate this cassa integrazione and the possible reduction in terms of people.
In terms of group presence by revenues and by geographies, I already mentioned that EMEA is our first market, with more than 64% in terms of sales, and this is quite stable compared also to the previous year and the second half of the 2023.
In terms of headcount trend, as you can see, the group at the end of this fiscal year, the year semester, posted a total number of employees of 4,252. Significantly lower compared to last year, if we exclude the GMM contribution, so same parameter, so BS versus BS, we have 260 people less compared to last year. This is a trend started more than one year ago.
If we compare the number of the headcount in June 2022 versus June 2024, so two years, we have more or less 500 people less in these two years. In terms of balance sheet figures, we registered a drop in net working capital.
The figures, December and the first half of 2023 are not comparable with the first half of 2024, because GMM were not included in the figures. If we align the numbers, so only BS, we registered a drop in net working capital of roughly EUR 11 million compared to December.
The major reason was a significant decline in down payment. So we posted less order compared to last year. We received more or less a down payment of 30% of on each order with a lower level of order. We have a lower level, obviously, of down payment.
In terms of inventory, we register in this half, as I mentioned, in the very beginning of the call, a problem in terms of payment, full payment from the client. So the client paid to Biesse a down payment, but until they not pay all the value of the machine, we do not deliver the machine, and we do not install the machine.
So we registered in the last month an increase of this situation, so client cannot pay all the amount of the machine, and they postpone the delivery of the machine. In terms of net financial position net of IFRS 16, we posted a positive amount, so cash higher than debt of EUR 24 million.
This EUR 24 million included EUR 53 million of long-term debt in BS that we'd loan for the GMM acquisition. Still remain available for BS, more or less EUR 50 million of committed line and loan, obviously. So notwithstanding a negative trends in terms of orders and also in terms of sales the group has a very solid net financial position.
The significant drop compared to last year, obviously, the majority of the drop was due to the payment of GMM acquisition, then the dividends and then lower EBITDA compared to the first half to the first half of last year, and also a significant drop in net working capital previously mentioned.
In the financial statement as of June 2024, Biesse has accrued more than EUR 70 million of provision related to stock provision, bad debt reserve, restructuring, warranty, litigation, and other provisions. So a very important amount of provision recorded in the financial statement that is the evidence of the prudence of the group in facing the negative situation.
The last page is the group shareholder. I think in the structure of the board of director is quite easy, with no significant changes in the last period. So before leaving the stage to the question, I want to underline some important points.
The first one is the market situation remain weaker, with problem in terms of credit, mentioned in terms of the problem of the client to pay the remaining amount of the machine, and the majority of our competitors are in a very significant difficulties.
The order trend is declining since 18 months, at least, but notwithstanding this decline, the economic and cash numbers of the Biesse Group remain very solid. In terms of industrial capacity, we have enough power to produce all the machine that we had in our forecast, so there's no problem in terms of industrial capacity.
The management during this period has the incredible capacity to face the situation and to accelerate all the strategic initiatives included in our business plan for the next three years, and this capacity gives immediately the effect of more than EUR 10 million of saving, already mentioned in the P&L, so this is the evidence of the capacity of the group to anticipate all the problems of the market and also to present a very solid strategic view and plan and to accelerate all the initiatives in terms of industrial personalization,
...commercial personalization, new catalog, portfolio catalog, new brand identity, so the group, notwithstanding the bad situation, does not stop the strategic initiatives, but accelerate the strategic initiatives to accelerate the sales.
In terms of acquisition, as I already mentioned, GMM posted more than EUR 60 million in terms of sales. This is a very positive result in terms of an impact, more than EUR 6 million. At the end of the year, the acquisition will bring to the Biesse Group more than EUR 100 million in sales. The last point is the outlook of the next six months. As you probably know, our business is quite stable during the year, so the P&L of the first half will be more or less the same for the next half.
Our provision in terms of sales could be more or less the same number of the first half, high range, or in case the economic situation will remain weak also in the next month, we can have a lower range of low single digit in terms of sales. So more or less, the second half will be the same of the first half, high part of the range. The lower part of the range will be more or less a low single digit in terms of sales. I leave the stage for the questions, in case you have.
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Okay. Thank you very much for your time.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.